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US$ 17 Billion Has Flown into MMF So Far This Year
Preference to Riskless Assets
US$ 17 Billion Has Flown into MMF So Far This Year
  • By Jung Min-hee
  • May 27, 2016, 04:15
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A total of 19.6 trillion won (US$17.04 billion) has been newly flowed into the MMF from the beginning of the year to May 25 this year.
A total of 19.6 trillion won (US$17.04 billion) has been newly flowed into the MMF from the beginning of the year to May 25 this year.

 

As domestic investors have a difficulty in finding a right place to invest, they are likely to deposit their money into Money Market Fund (MMF), a typical deposit account for stand-by investment funds.  

According to FnGuide, a total 19.6 trillion won (US$17.04 billion) has been newly flowed into the MMF from the beginning of the year to May 25, followed by bond funds with 3.4436 trillion won (US$2.99 billion). In contrast, a total 2.1010 trillion won (US$1.74 billion) flowed out from stock funds, including dividend stock funds and value stock funds. Over past 3 years, a total of 16 trillion won (US$13.9 billion) flowed out from domestic stock funds.

Kim Hoo-jung, a researcher of Yuanta Securities, said "As an effect of the rally of the rebound of international oil prices, international money overseas shows preference to risky assets, which drive the investment to move towards emerging economies from developed countries. However, it is quite the opposite in Korea." He added, "The MMF size is continuously growing for years. We can see people clearly favor the risk-free assets."

The total amount of money invested in the short-term financial products including MMF and Cash Management Account (CMA) is 119 trillion won (US$103.47 billion) as of May 26, which shows an increase of 25 trillion won (US$21.73 billion) from 94 trillion won (US$81.73 billion) at the end of last year.

As the market uncertainty increases, 294.9 billion won (US$256 million) newly flowed into the long short funds that pursue the absolute return. With the extensive public offerings of Hotel Lotte, Samsung Biologics, Doosan Bobcat ahead, 303.6 billion won (US$264 million) flowed into public equity funds.